Project finance secured to further develop Shakh Deniz

Akin Gump has advised Lukoil on a project financing of up to $1bn to finance further development of the Shakh Deniz gas field (Phase 2) in the South Caspian Sea in Azerbaijan. The deal is being financed by the European Bank of Reconstruction & Development (EBRD) and the Asian Development Bank (ADB), which are providing direct financing of up to $250mn each, while the Black Sea Trade and Development Bank is providing up to $60mn. In addition, up to $440mn of the financing will be provided by commercial lenders, including the Bank of China, ING Bank, Société Générale and Unicredit Bank Austria. It is planned to significantly increase field production, which will feed a southern transportation corridor through Georgia and Turkey for delivery to Greece, Bulgaria and Italy. The loan will be provided to Lukoil Overseas Shakh Deniz, which owns a 10% interest in the field project.